Question: A high tracking error indicates that O a. the variance of the return of the actively-managed portfolio O b. the variance of the return between

A high tracking error indicates that O a. the variance of

A high tracking error indicates that O a. the variance of the return of the actively-managed portfolio O b. the variance of the return between the portfolio and the benchmark is low O C. the difference between the returns on the actively managed portfolio and the benchmark index return is high. O d. the variance of the return of the benchmark index is high

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Tracking error is measured as O the variance of the return of the actively managed portfolio the variance of the return difference between the portfolio and the benchmark. the variance of the return...

Hi I just need you to help me to do a introduction about the paper you can read the whole paper simply and make a professional intro which has to be matched with the requirement. Introduction You are...

PROBLEM: TRACKING ERROR PORTFOLIO OPTIMIZATION INFORMATION RATIO = (PORTFOLIO RETURN - BENCHMARK RETURN) / TRACKING ERROR INFORMATION RATIO = (PORTFOLIO RETURN - BENCHMARK RETURN) / TRACKING ERROR...

Your client is willing to invest in Mutual funds industry to keep its portfolio diversified. Therefore he wants your advice in respect to which fund is better option for his risk level positions. He...

Year 0 1 2 3 4 5 Return Alpha Sum Tracking Error Information Ratio Portfolio Benchmark Portfolio Benchmark Difference Return Return Index Index 16% 9% -35% 22% 84% 14% 7% -38% 18% 86% 1.00 Required...

Current Macroeconomic Model W Factor Surprise inputs for and Estimates from the Current Macro Exhibit 1 Factor Sensitivities and Intercept Coefficients Benchmark Portfolio 3 Portfolio 2 0.8 Factor...

I am having problem setting up part 2 in excel. UNIVERSITY OF ILLINOIS AT CHICAGO Liautaud Graduate School of Business Department of Finance Professor Hsiu-lang Chen1 Practice Problem III Part I....

Tracking Error Fund Benchmark Active Dev from Squared Period Return Return Return Mean Deviation % % % 1 9.50 10.00 2 4.50 5.00 3 -2.50 -5.00 4 9.50 10.00 5 4.50 5.00 6 -2.50 -5.00 Sum Mean Variance...

Tracking Error Fund Benchmark Active Dev from Squared Period Return Return Return Mean Deviation 9.5010.00 4.50 5.00 -5.00-125-1 4 9.50 10.00-0. 4.50 5.00 6 -2.50 5.00 2.5 Sum Mean o. Variance 2...

Tracking Error Fund Benchmark Active Dev from Squared Period ReturnReturn Return MeanDeviation 10.00-0 5.00 9.50 4.50 -2.50 5.00 2.5 4 9.50 10.00-0. 5 4.505.00 6 -2.50 5.00 25 Sum Mean 0. Variance 2...

Some people believe those under 21 serving in the military should be allowed to drink alcohol even if non-military citizens are not. the crux of the argument is, if I am old enough to die for my...

Susan Cheng is the CFO of Automotive Solutions, a small company that makes specialized lighting equipment for the car industry. Because of intensified competition from foreign companies, Automotive...

Item 4 5 points Item 4 The limited liability provided to limited partners means that they are not responsible for the debts of the business beyond Multiple Choice the amount they have invested in the...

In which of the following situations would the taxpayer not be considered in constructive receipt of income in 2020? Assume that all of the taxpayers use the cash method of accounting. a. Al is a...

4. Development road map: Descriptions of development activities that should occur at each career level and that support development needs and prevent derailers. These activities include job...

3. Development needs: Needs that frequently occur at each career level, those that vary by individual, and the derailers that can stall career progress and negatively affect performance. Ways to...

4. Learning Labs: These five-day in-class workshops build on the learning acquired during the previous phases of e-learning. The workshops emphasize peer learning and the development of a learning...